Scott Morrison touts a new era of state unity for economic recovery

Scott Morrison will work with national cabinet to overhaul jobs training across a range of industries.

Scott Morrison will push for a new industrial relations alliance. Picture: Getty Images

Scott Morrison will work with national cabinet to overhaul jobs training across a range of industries, as federal and state governments move to build the nation’s post-COVID-19 workforce, targeting employment growth as the key to Australia’s economic recovery.

A historic joint effort between the commonwealth, states and territories to drive reform across major planks of the economy including tax, industrial relations, regulation and skills and training would mark a turning point in co-operation between the two levels of government under the federation.

The national cabinet is expected to lead reform of the skills sector and an overhaul of the current TAFE model, establishing a uniform and efficient price for training costs and targeting government spending on the number of places available to service industry needs.

Its focus is expected to be meeting industry demands for skilled workers and supporting modern and competitive manufacturing, agriculture, resources, construction, health and IT sectors.

Speaking at the National Press Club on Tuesday, the Prime Minister will also argue for greater accountability in the spending of $1.5bn in skills funding to the states and territories and describe current arrangements as “fundamentally flawed”.

Mr Morrison, who will push for a new industrial relations alliance to support a modern and competitive economy, has flagged an increase in federal funding for skills under a reformed system backed by states and territories.

“By law, the commonwealth must hand over to the states and territories $1.5bn in untied funding every year — with no end date and no questions asked,” Mr Morrison will say.

“The commonwealth has no line of sight on how states use this funding. Where targets do exist, they are aspirational; if not met, there are no consequences.

“The agreement has also been ineffective in maintaining levels of investment.

“VET funding across all jurisdictions — except Tasmania — has fallen by 25 per cent on average over the past decade in real terms, on a working-age-per-capita basis. So it’s time to make some changes.”

Using the national hospital agreement as a model to improve the skills, vocational education and training sector, Mr Morrison will say that reforms would focus on fixing the “complexity of a system that is clunky and unresponsive to skills demands” and a funding system marred by “inconsistencies and incoherence with little accountability back to outcomes”.

While federation, tax, deregulation and energy reform remain key components of the government’s agenda, Mr Morrison focuses his speech on industrial relations, economic growth principles and improvements to the skills sector.

As revealed by The Australian last week, Mr Morrison will work towards establishing a new industrial relations compact between workers, employers, unions and government to boost employment and repair a pre-COVID-19 system that had undermined productivity. Mr Morrison will use the major economic speech to call out the disparity in fees across states and territories, and the “bewildering” number of choices facing students, with more than 1400 qualifications on offer.

Highlighting the inconsistent approach to training, Mr Morrison will reveal students undertaking a certificate course in blinds, awning and security screens received a subsidy of $3726 in Queensland, $9630 in NSW and no subsidy in Victoria, unless the qualification was taken as an apprenticeship.

“Subsidies for a diploma of nursing in 2017 varied between $19,963 in Western Australia and $8218 in Queensland. And all of this is before the question surrounding the quality of the training is addressed,” he will say.

“It is no wonder that when faced with this complexity, many potential students default to the university system, even if their career could be best enhanced through vocational education.”

Mr Morrison will outline five key principles underpinning the government’s JobMaker plan to reboot the economy and implement historic reform and warn that “demand stimulus” is a temporary fix.

Positioning the October 6 budget as critical in resetting economic growth over the next three to five years, Mr Morrison will declare “these difficult times are not the product of economic failure but a global health pandemic”.

“The backdrop for the budget will be stark,” he will say.

“An historic deficit, which not for the crisis would now be in surplus. Debt rising above 30 per cent of GDP. Unemployment at around 10 per cent; global trade expected to fall by up to one-third, global foreign direct investment by up to 40 per cent — arguably the most challenging environment this country has ever faced, outside of wartime.”

The five JobMaker principles include ensuring Australia stays an “outward-looking, open and sovereign trading economy” and supporting “an educated and highly skilled workforce” to complement modern and competitive manufacturing, resources and agricultural sectors.

Mr Morrison will also champion the importance of not punishing Australians who succeed and “doing what makes the boat go faster”, offering hundreds of thousands of small, medium and large businesses the opportunity to “earn our way out of this crisis”.

“That means focusing on the things that can make our businesses go faster,” he will say.

Industry groups including the Minerals Council of Australia, Housing Institute of Australia and Business Council of Australia have been pushing for increased funding and support for skills and training in a post-COVID-19 economy. MCA chief executive Tania Constable said on Monday “skills and training needs will require a particular focus, including retraining and reskilling entrants from other industries affected by COVID-19”.